Overall, a good report. The payrolls number was a disappointment, however we did see an increase in the labor force participation rate and an increase in average hourly earnings. The employment to population ratio was steady at 59.7%. The job growth was primarily in health care and social assistance. Retail gained, as well as transportation. Finance grew as well.

The focus for markets in on wage growth, as that is going to be the big determinant of Fed policy. I have plotted average hourly earnings over the past 10 years. You can see that the slope of the blue line (wage inflation) has almost come back to pre-crisis levels. In fact, wage inflation is the highest since 2009. The gap between the two red lines represents the damage done by the Great Recession. The bigger question is whether employees get their raises in the form of higher benefit costs or whether it shows up in their paychecks. That will depend (in part) on whether the young Millennials get jobs, as they will help the risk pool which should (all things being equal) help lower health insurance costs for everyone else. Universities are reporting lower enrollments, which is a tell that Millennials are finding jobs. Note that sentiment indicators show that Millennials are more bearish on the economy than most, though this could be explained by partisanship.

Bonds sold off slightly on the report, with the 10-year reaching 2.4% before dropping back down. We have had some hawkish Fed-speak with Loretta Mester suggesting more than 3 hikes might be necessary and Williams saying 3 hikes would be reasonable. Remember, just because the Fed Funds rate increases, it doesn’t automatically follow that long term rate (which determine mortgage rates) will also increase. The last few tightening cycles have seen a flattening of the yield curve.

56 Responses

“Congress looks to start building a Mexican border wall within months
…
A number of Republican lawmakers believe that Trump has authority under the Secure Fence Act of 2006 to commence construction on a wall. That law, backed by President George W. Bush, mandated 700 miles of “reinforced fencing” along the U.S.-Mexico border along with enhanced surveillance systems that came to be known as a “virtual fence.” But the full complement of barriers was never completed, and GOP lawmakers believe that the law provides sufficient authority to complete a full border wall like that described by Trump.
…
Several high-profile Democrats, including then-Sen. Barack Obama and current Senate Minority Leader Charles E. Schumer, voted for the Secure Fence Act.”

“If you understand immigration policy as a kind of negotiation between the United States government, legal immigrants, and unauthorized immigrants — which is clearly how Trump understands it — his plan is to win the negotiation by being willing to inflict more suffering than the other actors can bear; he is willing to care least about the human cost of the negotiation.”

I’d add the Mexican government and others to the list of actors in the negotiations.

I am reading many of your comments to be schadenfreude. You are happy to see liberals in a panic. I cannot tell if you are happy with the prospects of a President Trump.

I am not. I think his choices for both SeDef and SecState were good, although Rex will have to tell the Senate he will not have the interests of Exxon in mind as he goes about the business of foreign affairs. Bu this staffing issue at Defense that has the transition team at odds with the designated SecDef is major bad shit.

And you already know what i think of his Israel policy if it is represented in the person of the bankruptcy lawyer who is a religious fanatic and sees Palestinians as interlopers in the Holy Land.

Flynn is just plain nuts as an appointment and Woolsey quitting the Trump team over it is just the beginning.

The refusal to accept that Russia and Wikileaks were fucking around in our election and are now fucking around with Germany and France to undermine the Euro-American alliance, NATO, and the EU is baffling and leads me to wonder how much he owes his Russian investors for the Trump Tower in Toronto.

Scott, if you could get me behind the WSJ paywall, I’d like to read their analysis of his debts that apparently was in this morning’s edition.

So you can go back to your gloating about the liberals now. Their main screw ups are well known, and the resulting R domination of Congress is one result. Gloating about electing a R Congress would make sense to me, hell, I gave McC $250 again, but celebrating Trump, even for his political rather than his policy acumen seems like an awful diversion of energy. In fact, if he continues down this road of sowing chaos, stiffing creditors, being deposed left and right, walking away from alliances, I would not be surprised if Rs would be looking to Pence and thinking that impeachment is looking ever better. The tweet about Ahnold and the TV show actually started me wondering if he is beginning the descent into dementia, living in the past because he may not have the short term memory to deal with the difficult stuff.

Looking over what I have written I am tempted not to post it, because maybe there will be method to his madness. Nah. There won’t be.

Addendum: I watched the entire hearing yesterday on CSpan. That certainly has had an effect on my outlook today.

I made peace with the fact that I wasn’t going to be happy with the winner a long time ago. I’m not indifferent to Russian moves, but I do not believe the latest dust up for the press and democrats is about your concerns at all. This is pure embarrassment being spun. I really do believe that.

I guess want i’m saying is .. if Clinton won, this whole thing is buried on page A20 and relegated to the cyber security trade press.

For the schadenfreude to go away, all they would have to do is acknowledge “we don’t have the answers, but maybe contempt isn’t one of them.”

I cannot tell if you are happy with the prospects of a President Trump.

It’s all relative. I am happier than I would be with the prospects of a President Rodham-Clinton or a President Obama.

The refusal to accept that Russia and Wikileaks were fucking around in our election…

I don’t accept the false framing of this issue that is standard among the Dems and the media. Russia hacked the DNC and John Podesta, not our “elections”. And if revealing politically embarrassing information or spreading “fake news” qualifies as “fucking around” in an election, then the NYT and the WaPo have been fucking around in our elections for decades.

While I agree with you about the false framing, I still don’t completely buy this as an act of the Russian state. I know the report has been officially releases and fingers Russia. I guess I need to read it. Sheesh.

“And if revealing politically embarrassing information or spreading “fake news” qualifies as “fucking around” in an election, then the NYT and the WaPo have been fucking around in our elections for decades.”

“And if revealing politically embarrassing information or spreading “fake news” qualifies as “fucking around” in an election, then the NYT and the WaPo have been fucking around in our elections for decades.”

The left isn’t used to it. When you are used to privilege, equity feels like oppression…

That’s exactly right. I voted against Trump by marking the ballot for HRC (as distinct from voting for her) because I thought he was too risky of a choice and still do and gridlock that maintained the status quo was fine with me.

However, the full fledged meltdown of Democrats and progressives in reaction to his winning and subsequent behavior has truly been unhinged and disgraceful.

The schadenfreude is the consolation prize.
“The refusal to accept that Russia and Wikileaks were fucking around in our election”

I actually assumed originally that a hacking team with ties to Russia was the original source of the leaks, but every actual piece of real evidence that’s been produced to support this has been underwhelming. They are making up for it by shouting louder. The BS about the Vermont electrical grid being hacked really clarified for me the level of disinformation being peddled to the media.

More to the point, the fact that the media reported true information about the Democrats that WikiLeaks released that may have originally came from hackers associated with Russia doesn’t bother me in the least. If it wasn’t for anonymous sources and leaks, there would be pretty much zero reporting. Trump got plenty of bad press from leaks as well.

I’ve long since accepted that as a Libertarian I’m not going to get my policy preferences enacted. Trump’s just a different flavor of things that I don’t like.

But I have zero sympathy for those on the left who said that Trump had no chance for months and were looking forward dismissing his supports as irrelevant after the election and now find themselves in a state of dismay.

Also I’d recommend this as a read if you haven’t seen it before. It’s the best piece I’ve seen on how to really oppose Trump, but I don’t expect the Democrats and progressives to take it up because it would require them to engage him and his positions seriously rather than continue the campaign to try and prevent the “normalization” of Trump.

“The case for normalizing Trump
Foreign populists have been beaten by talking issues, not personality.
Updated by Matthew Yglesias
Nov 30, 2016, 7:30am EST
…
To beat Trump, what his opponents need to do is practice ordinary humdrum politics. Populists in office thrive on a circus-like atmosphere that casts the populist leader as persecuted by media and political elites who are obsessed with his uncouth behavior while he is busy doing the people’s work. To beat Trump, progressives will need to do as much as they can to get American politics out of reality show mode.”

…but I don’t expect the Democrats and progressives to take it up because it would require them to engage him and his positions seriously rather than continue the campaign to try and prevent the “normalization” of Trump.

Yup. Even outside of Trump and with so-called normal politicians, the left’s primary political tactic has long been not to engage but to de-normalize and demonize.

George, instead of birth certificate IDs, a bathroom law should be based on current organ

I am with McWing on this issue. Any discussion premised upon the idea that “bathroom laws”, no matter what their content, are a legitimate act of legislation and use of government power is not a discussion worth having.

“The issue began when Charlotte, the state’s largest city, passed a law early this year that prohibited discriminating against residents based on their sexual orientation or gender identity. (Despite wide belief to the contrary, most cities and states don’t explicitly prohibit such discrimination; neither does any federal law.)”

“This is the kind of thing conservatives were disparaged for saying for several decades. Now let’s get specific. Occupy Wall Street was, evidently, a Russian front operation:
RT aired a documentary about the Occupy Wall Street movement on 1, 2, and 4 November. RT framed the movement as a fight against “the ruling class” and described the current US political system as corrupt and dominated by corporations. RT advertising for the documentary featured Occupy movement calls to “take back” the government. The documentary claimed that the US system cannot be changed democratically, but only through “revolution.”
Putin’s government also took concrete steps to help advance the Occupy movement:
RT created a Facebook app to connect Occupy Wall Street protesters via social media. In addition, RT featured its own hosts in Occupy rallies.
Russia’s support for Occupy Wall Street was consistent with the left-wing tenor of its efforts to influence politics in the U.S.:
RT Editor in Chief Margarita Simonyan recently declared that the United States itself lacks democracy and that it has “no moral right to teach the rest of the world.”
A theme that we hear all the time from the Left. Another left-wing theme that the Russians have promoted is that America’s two-party system doesn’t represent many of our people:
In an effort to highlight the alleged “lack of democracy” in the United States, RT broadcast, hosted, and advertised third- party candidate debates and ran reporting supportive of the political agenda of these candidates. The RT hosts asserted that the US two-party system does not represent the views of at least one-third of the population and is a “sham.”
Jill Stein, anyone? Was she a Russian tool?”

Just how deep is this goddamn rabbit-hole? When I go to DailyKos is it just a renamed Pravda?

Now that I have had my coffee, I think that if Mattis and Tillerson are permitted to truly oversee DoD and SD and are listened to by DJT nothing stupid will happen, because they are smart guys. I hope the Ds join in approving them, after decent vetting.

But Flynn as NS Advisor does raise a lot of questions that unfortunately, the Senate cannot get answered, because the post does not require Advice and Consent.

There is a common meme that suggest they are depending on all of Trump’s middle-American voters to suddenly be horrified when Medicare and Social Security is ended and Obamacare is repealed (because of course, Trump is going to stop all entitlements) and maybe when they realize Communists installed our presidents, and take to the streets with all their weapons.

Basically, they are depending on the Bitter Clingers to conduct an armed revolution (something they previously have realized is not possible, but have now forgotten) against a highly-militarized state because in response to things that will not happen but they imagine will happen.

These are the same folks that used to pronounce their wisdom on the inferiority of African Americans, having rarely met them or seen them and having nothing to do with them in their day to day life, and they don’t know it. They think it’s totally different when they are talking about rural and small town America.